Monday, July 23, 2007

I get this question a lot. The best way to think about an online auction is as a different marketing strategy. Do they work in attracting interest? Yes! Will they help you find a buyer? Sometimes. Will they help a property stand out? Yes! Is it as easy as posting it on an auction site? No. It takes a planned effort, marketing and a little time, but it can be well worth it. However, if you think about it, what other things can you do that will make your property stand out and attract attention like an auction does?

Saturday, July 14, 2007

1. When using a reserve price, start the bidding at least 50% below your reserve price. - You can never start too low. When buyers see you are using a reserve, they expect your starting bid is way below your reserve price. The idea is to attract attention. What starting bid will do that for you?

2. Consider NOT using a reserve price. - You don't have to use a reserve price and some buyers are more attracted to auctions with NO RESERVE (a.k.a. Absolute Auction). If you've got a great deal, your starting bid with "NO RESERVE" can attract just as many buyers as using a reserve.

3. Seller Financing - The number one question asked of sellers on our site is "Will you finance". If you are in a position to do that such as Contract for Deed, Lease-Option or even if it's on Hard Money terms (high interest rate, short term), your deal will be much more attractive.

4. Bid on Assignment Fee - As long as you are clear in your listing the terms of your contract and details of your contract available to the bidders, you can have the bidding be on your assignment fee. Start it at $100 and let the market determine what your contract is worth.

5. Bid on Your Option - Do you have an option on a property? Have investors bid on buying your option.

6. Include Property Resources - If you have a rental property you are selling, have a few property managment companies, handymen, etc. you can refer bidders to. Including these as part of your listing makes your auction more attractive.

7. Include Finance Resources - If you need to sell for cash, make it as easy as possible for interested bidders by including information about financing companies such as Hard Money Lenders, Mortgage Brokers, Lenders, etc.

Thursday, July 12, 2007

As a real estate investor who "wholesales" properties, it's important to have a buyers list. When you have a list it makes it easier to find a buyer for your deals. We realized that it would benefit sellers who list a property on our site to have a list of buyers in place. We are actively growing that list and they automatically get notified when a new auction is listed. But that's not enough, we want it be easy for sellers to market to any existing audience they already have. We created tools to help with that. The combination of our list, the seller's list and a little additional online and offline marketing will make a big impact on the success of an auction.

Sellers who realize the potential and put forth the effort will reap big rewards.

Monday, July 9, 2007

Right now, it’s a buyer’s market. Buyers have lots of properties to choose from and sellers are looking for a way to stand out. It’s not a surprise that more sellers are turning to auctions for help.

A couple weeks ago, I attended a live auction in St. Louis, MO in which 6 properties were auctioned. The auction took place on the front steps of 1 of the properties. About 40 people attended and probably 20-25 took part in the bidding. Out of 6 properties, 5 of them sold at prices that, if listed in the MLS, would have sat for weeks and maybe months. Only one didn’t go well (receiving only one bid) and that property recently caught fire and was a tear down in a rural area, but at least it sold. I’ve attended auctions before, but in this market it proved to me once again, that an auction is definitely the best way to sell quickly and for a decent price. It’s no surprise that auctions are growing in popularity, especially in the market we are in today. There aren’t many other solutions for sellers who need to sell quickly and buyers are drawn to them because of the hope of a big discount.

As the market and technology changes, a shift is beginning to take place and we are seeing more real estate auctions take place online. The reason for this shift is because technology is making it easier, less expensive and just as exciting.

A successful online auction still requires planning, online and offline marketing, and sometimes holding open houses. However, all the effort pays off by bringing lots of attention and being able to condense the time it takes to sell. One of the biggest benefits is that buyers don’t all have to be at one place at one time to bid. They can connect whenever and from wherever they have Internet access.

An auction, whether online or live, helps a property stand out and that’s the goal for any sale. Auctions are a very effective selling strategy and especially appealing in a slow market.

About Tom Wood

I'm a real estate broker & online real estate auction expert in St. Louis, MO. I'm also the co-founder of Real Estate Auction Systems which is an online real estate auction system & service which we sell to real estate agents and auctioneers.
We have an Enterprise version of our auction system for auctioneers, Realtors and anyone else who wants their own private branded online real estate auction system. For more details on our Enterprise version visit our info and demo site